Which of the Following Is Least Likely to Be Correct

question 46

Multiple Choice

Which of the following is least likely to be correct about the factoring of receivables?

• A) The selling firm bears the risk of default.
• B) The higher the perceived quality of the receivables, the lower the discount rate.
• C) The discount is paid by the selling firm in the form of reduced sales price.
• D) Factoring may be the cheapest method of avoiding a cash flow problem.

---

Definitions:

Personal Income Taxes

These are taxes levied on individuals or households based on their total income from various sources, after allowances for deductions and credits.

Corporate Income Taxes

Taxes imposed on the income or profit of corporations, which can affect their investment decisions and economic growth.

Sales

Transactions where goods or services are exchanged for money, usually considered a measure of a business's success or economic activity in a market.

Excise Taxes

Taxes imposed on specific goods, such as tobacco and alcohol, often intended to reduce consumption or generate revenue.